According to the most recent International Trade Association data available through the Small Business Administration, small businesses represent 97.7 percent of the U.S. firms that export goods to other countries. In fact, they account for over one-third of the United States’ known export value.
With business technology ever evolving, expanding our collaboration and communication capabilities, we can assume that more small business owners will want to seize opportunities to extend their customer base beyond U.S borders. With 96 percent of global consumers living outside of the United States (according to the U.S. Department of State), reaching a global market can fuel revenue growth and offer some protection against fluctuations in the U.S. domestic markets.
Risks and Considerations of Doing Business Globally
If you’re considering doing business internationally, realize the opportunities are accompanied by risks. Business owners must pay attention to issues they don’t normally have to consider when providing goods and services within the U.S.
- Protection of Intellectual Property Rights (IPR)
- Logistics of getting paid
- Taxes and tariffs imposed by other countries
- Undependable postal and delivery services in other countries
- Countries’ diverse rules, restrictions, and license requirements for shipping products to them
- Increased shipping costs to send products overseas
- Cultural expectations in doing business
- Trust issues when working with far-away partners or agents
- Language barriers
Fortunately, several resources exist to help business owners understand what’s involved and how to move forward.
Resources That Offer Information and Programs in Support of International Trade
This office works with other federal agencies and public and private groups to help small businesses compete in the global marketplace.
This program gives small businesses direct access to ambassadors and economic and commercial experts at over 260 Embassies and Consulates in over 190 countries. The State Department also operates the Business Information Database System (BIDS), a portal to help U.S. companies learn about international projects that may offer business opportunities.
This service can help small businesses by connecting them with pre-screened representatives, distributors, professional associations, government contacts, joint venture partners, and other individuals and organizations.
This site provides links to information about doing business in specific countries. It offers insight and data about various countries’ cultures, business climates, market research, service providers, trade events and other information.
Because of the added complexity involved in expanding a company’s reach to other nations, it’s helpful to seek guidance of an attorney and accountant for legal and financial direction.
As you develop your business plan for selling your products to the global market, you can also gain insight and feedback from a SCORE mentor.
Since 1964, SCORE “Mentors to America’s Small Business” has helped more than 10 million aspiring entrepreneurs and small business owners through mentoring and business workshops. More than 11,000 volunteer business mentors in over 320 chapters serve their communities through entrepreneur education dedicated to the formation, growth and success of small businesses.